Port of Cotonou: preparatory studies funded by the UMDF lead to a loan from the AfDB
On July 14, 2023, the Board of Directors of the African Development Bank Group sanctioned a EUR 80 million loan to the Port Autonome de Cotonou (PAC) in Benin as part of its EUR 425 million 5-year Port Master Plan.
The UMDF contributed to the Port Master Plan through a facility called "Small Grant Initiative”, financing more specifically the Market Study, conclusions of which highlighted the economic viability of the project.
An important gateway for landlocked countries
The port of Cotonou was developed as a city port and a potential gateway to Benin, landlocked countries such as Burkina Faso, Mali, Niger, and Nigeria. Although some part of the port has been modernized in the past with new cargo handling equipment and improved infrastructure intended to improve productivity, despite these developments, the port still faces capacity constraints and service delivery challenges. These include low labor productivity, cargo clearance delays, lack of full automation, traffic congestion and poor urban planning around the port. These issues are compounded by changing ship technology, with larger ships requiring more draft and greater efficiency. Consequently, the region experiences high transit time leading to increased costs of transporting goods between the port and load centers in the hinterland.
Anticipating the traffic growth
Given the strategic importance of the PAC to the country and its impact on the city with the forecasted traffic growth, resources were sought from the “Small Grant Initiative” window of the UMDF to finance a Market Study early on to validate the projected traffic growth expected from operationalization of the Port Master Plan and its impact on the urban environment around the port, mainly road traffic, and provide mitigation measures.
The study concluded that the traffic is indeed expected to conservatively grow from 11.8 million tons of throughput at the port in 2021 to 20 million tons in 2033 with container traffic expected to continue representing half of the total tonnage. This envisaged traffic growth at the port means inevitable means an increase in truck traffic and, as such, thorough mitigation measures would have to be put in place to limit the externalities for the urban dwellers and surrounding communities.
Assessing vulnerabilities to climate risks
In addition to the UMDF support, the PAC also benefited from an additional study financed by the Global Center on Adaptation, which notably analyzed the project from the perspective of its vulnerabilities to climate risks. All recommendations have been included in the design of the infrastructure and soft measures as part of the Environmental and Social Management System of the PAC.
Port expansion and improved connectivity
As such, the financial support from the Bank Group will facilitate the establishment of a new terminal by extending the port area by an additional 20 hectares designed for handling bulk cargo, and the establishment of a central access point to the port equipped with a digitized truck calling system linked to the 14-hectare parking zone for heavy-duty vehicles.
Anticipated results include a reduction in transit time within the port area to two hours, thus alleviating congestion on adjacent roads. The project aims to enhance working conditions for haulage truckers and create a more conducive business environment for customs personnel and their technical partners. In turn, the government of Benin stands to gain from increased tax revenues and dividends resulting from the project. Furthermore, the initiative is expected to generate employment, particularly during the construction phase, offering additional opportunities for port operators, as well as other stakeholders such as truck owners and ship loaders.